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Commitments and Contingencies
 9 Months Ended
Sep. 30, 2012
Commitments and Contingencies [Abstract]  
Commitments and Contingencies
11. Commitments and Contingencies

Employment Agreements

The Company has employment agreements with certain employees which are in effect as of September 30, 2012. The agreements provide for minimum salaries, which may be subject to annual percentage increases, and non-equity incentive compensation for certain executives based on pre-tax income or net income levels attained by the Company. The agreements also provide for payments contingent upon the occurrence of certain events.

The following table presents the amount of commitments and estimated contingent payments the Company is obligated to pay in the form of salaries and non-equity incentive compensation under the agreements with named executive officers (in thousands):

 

                         
    As of September 30, 2012  
    Salaries     Non-equity
incentive
compensation		     Equity
compensation		  

Commitments

   $ 6,620     $ 4,234       —    

Contingent payments upon certain events:

                        

Termination

   $ 4,588     $ 2,823       —    

Change in control

   $ 14,214     $ 5,016     $ 529  

Death

   $ 3,811     $ 2,861       —    

Disability

   $ 2,365     $ 1,783       —    

Litigation

Certain lawsuits have been filed against the Company. These lawsuits involve matters that are routine litigation incidental to the claims aspect of the Company’s business for which estimated losses are included in Unpaid Losses and Loss Adjustment Expenses in the Company’s Condensed Consolidated Financial Statements. In the opinion of management, these lawsuits are not material individually or in the aggregate to the Company’s financial position or results of operations. Accruals made or assessments of materiality of disclosure related to probable or possible losses do not consider any anticipated insurance proceeds.

Loss Contingencies

In late August 2012, the Company decided to forego efforts to collect $5.4 million the Company believed was owed by a reinsurer. This decision was based upon management’s belief that the tangible and intangible costs associated with the effort to collect would exceed the $5.4 million that the Company believed was recoverable from the predecessor quota-share reinsurer. Management considered several factors in making this decision, including the legal and internal costs associated with the collection effort, the potential disruption of business and diversion of internal resources during hurricane season, management’s desire to maintain good business relationships with the predecessor quota-share reinsurer and the successor quota-share reinsurer, as the Company currently conducts business with both parties. The write-off of the associated reinsurance receivable of $5.4 million is reflected as an increase in ceded written and ceded earned premiums in the Condensed Consolidated Statements of Comprehensive Income for the three and nine months ended September 30, 2012. The after-tax effect of the write-off of the reinsurance receivable was $0.08 per diluted share for both the three and nine months ended September 30, 2012.